Google and Its Expansion Strategy

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Popularity of Mergers and Acquisitions in Companies Competing in Global Economy: Google and Its Expansion Strategy

Being competitive and successful is not an easy task for a XXI-century company, especially within the environment of a globalized market, mostly because of the extremely high rates of competition. For a company that is going to expand into the globalized market, it is crucial to have enough support and be competitive in the new environment.

The number of demands towards a company entering the global market are huge; suffice to say, without enough resources, working strategy, and a cohesive backup plan, a company can hardly survive in the global economy (Grant vi). More to the point, the significance of information, especially the speed of its acquisition has peaked in the XXI century.

As long as a company leader is unwilling to fail within the context of the global economy, their company must merge with other firms and acquire small entrepreneurship shares actively or, at the very least, has a distinct plan on how to acquire stocks and shares of minor entrepreneurships and create links with future partners, which the example of Google, Inc. has shown in a very graphic way.

The popularity of mergers and acquisitions has become especially evident in the XXI century; however, it was not until Google, Inc. decided to establish stronger links with the Android, Inc. in August, 2005 that the world of entrepreneurship recognized more than merely a tendency behind the given strategy; by 2006, when Google bought a huge chunk of the YouTube shares and merged with the given service, it was clear that the more a global market titan is, the more support it needs to withstand the possible backlash of the rivals, haters or any other groups that may possibly harm the company’s reputation.

The merges are popular within the global economy for several reasons. To start with, merging with a company or acquiring one, an organization becomes more capable of dealing with the informational torrent.

The more people are processing the demands within the target market, as well as the moods of the target customers and their reactions towards the supplies, the production of the rivals, the more detailed the data concerning the target market and customer the company is going to get, which will affect the firm’s revenues impressively. Not only will the company be able to provide the potential clients with the services that they need, but it will also be capable of tracing the changes within the market quickly and react to them fast and adequately.

Another obvious positive effect of acquisition and merging policies within a company that is going global concerns its resilience. In other words, a company that has acquired a number of other SMEs and merged with several influential services may survive a massive disappointment.

For example, as soon as the YouTube services were changed to fit the Google+ formula, a number of YouTube users were frustrated, to say the least. Because of the necessity to create a Google+ account in order to be able to comment videos on YouTube, people were hyped and burning with indignation; there were protests in media and even the mini-movement headed by the so-called Bob:

Bob Has an Army, Tanks, Air Support, and HATES Google+

Zybak TV. Bob Has an Army, Tanks, Air Support, and HATES Google+. A snapshot. 15 Nov. 2013.

However, despite the heavy criticism of the new YouTube feature, the Google, Inc leader decided to insist on the new strategy, which finally resulted in people accepting the new rules; “Bob” vanished from YouTube pages without a trace. In addition to the public success, the cooperation with YouTube allowed to improve the status of the Google+ service, which suffered from desolation until the company acquired YouTube.

Another important effect that mergers and acquisitions have on the company’s productivity and operations concerns the organizational behavior and company’s corporate values. According to the existing data, with the introduction of new acquisitions into a company, the quality of relationships between employees and management, employees and customers, and among employees is increased impressively, not to mention the fact that the significance of corporate ethics is increased quite a few notches.

The given change in organizational behavior patterns can be attributed to the fact that, when merging with other organizations, a company becomes more open towards international communication and, more importantly, has the chances of having more diversity among its members.

Thus, the chances for reducing the instances of discrimination and prejudice related misunderstandings are reduced impressively. In addition, the cultural norms of the company are also upgraded once the firm in question merges with the representatives of other cultures and ethnicities. Taking the Google, Inc. as an example, one must mention that the company did tap into serious discrimination offense in the past.

According to the records of the Justia US Law, the NC Financial Corporation filed a lawsuit against Google, Inc. for the dismissal with prejudice (CNG Financial Corporation v. Google Inc – Document 86 para. 1). As the company evolved, though, it seemed to have considerably fewer incidents related to prejudice. The given change can be attributed to the increase in the company’s diversity, since the Google, Inc. started acquiring new SMEs and merging with influential corporations at the time.

Eventually, the most important aspect of mergers and acquisitions as the key boosters of a company performance within the globalized environment should be mentioned. According to the existing data, mergers and acquisitions improve an organization’s financial performance immensely, therefore, making it even more efficient within the target market.

The Google, Inc. has shown over the past few years that with the help of the policy of mergers and acquisitions, it is possible for a company to succeed within the global economy by reducing the taxation, improving the scope and the scale of economy and using cross-selling and vertical integration within a company.

Merging with the Motorola Company in 2011, the Google Company managed to create a vertical integration within the company. By providing Motorola with the support that it needed and investing into it greatly, Google managed to both upgrade its own reputation within the global market and at the same time create the premises for Motorola to revive:

At first they could just gleam value from the patents and hope that this alone was worth the price. However, having Motorola in their backpocket that would let them become vertically integrated at the turn of a switch was the real goal of this acquisition. (Bajarin para. 8)

Even though Google admittedly had its own reasons for merging with the companies listed above and that it pursued its own goals, the company admittedly integrated into the globalized economy and helped other organizations become a part of the global market. Therefore, the use of mergers and acquisitions by Google can be justified as a viable and valid strategy.

Therefore, as the example of Google, Inc. shows, it is crucial for a company competing within the environment of global economy to acquire new SMEs and build strong partnerships with other influential companies. The more links a company has established, the more competitive it can be within the global environment.

More to the point, such companies as Google, Inc. will not have to be afraid of crises as badly as the SMEs that are only starting going global are. With all the information distribution and other knowledge management issues that the companies like Google may have, they are still much more viable with the support of the numerous companies that they have merged with.

Despite the threats that the process of merging with other companies involves, including the complexities in establishing the system of knowledge sharing and the chances of failing to build trustworthy relationships with partners, the Google, Inc. seems to have succeeded in its expansion strategy and proven that becoming a part of global economy presupposes creating worldwide links.

Although the process of managing the information flow between the companies and their affiliates may be extremely complicated, the risk is well worth the outcomes – expansion is important for present-day companies, and, in order to enter the global market, one will have to make sure that there is a range of partners supporting the company; otherwise, the latter is doomed to failure.

Mergers and acquisitions are not merely a trend or a gimmick of major corporations – instead, these operations should be viewed as a powerful tool of expansion that they are.

Works Cited

Bajarin, Tim. “Why Google Will Use Motorola To Become Vertically Integrated.” TechOpinions 8 June 2013: n. p. Web.

CNG Financial Corporation v. Google Inc – Document 86. n. d. Web.

Grant, Robert. Contemporary Strategy Analysis. 8th Edition. New York, NY: John Wiley & Sons, 2012. Print.

Zybak TV. Bob Has an Army, Tanks, Air Support, and HATES Google+. A snapshot. 15 Nov. 2013. Web.

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Google and Its Expansion Strategy

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